MB STAINLESS HELSINKI: Ferro-nickel ‘losing competitiveness’ against stainless scrap, NPI

Ferro-nickel has lost competitiveness against stainless steel scrap and nickel pig iron (NPI) as a raw material input for stainless steel, according to Frank Ehrenberg, senior vp for raw materials procurement at Finnish steelmaker Outokumpu.

At the Metal Bulletin and Steel & Metals Market Research (SMR) stainless steel conference in Helsinki, Finland, on Wednesday September 19, Ehrenberg said that Chinese stainless mills were now using less imported ferro-nickel due to plentiful supplies of local NPI.

“Ferro-nickel is starting to be discounted due to this trend,” Ehrenberg said, adding that the move away from ferro-nickel was not just confined to China and the change was likely to be a worldwide trend.

Metal Bulletin price assessment for ferro-nickel premiums, cif China, was rangebound between a discount of $200 per tonne and $300 per tonne on August 28, down from a premium of $200-350 per tonne two months earlier on June 25.

Metal Bulletin’s price assessment for 10-15% nickel content China high-grade NPI spot material was 1,060-1,080 yuan ($155-158) per nickel unit on September 18, down from a recent high of 1,120-1,140 yuan per nickel unit on September 4.

Ehrenberg said European mills were also using less ferro-nickel “due to the good availability of stainless steel scrap at high discounts.”

Earlier this month a trader told Metal Bulletin that nickel discounts were at record levels.

“We have a historically wide nickel discount [for nickel units in the scrap relative to the LME price] with the mills,” the trader said.

Metal Bulletin’s weekly price assessment for 18/8 stainless steel solids imported into mainland Europe was €1,050-1,100 ($1,226-1,285) per tonne cif main European ports on Friday September 14, down from €1,120-1,150 per tonne two weeks earlier, following heavy nickel losses on the LME.

Stainless scrap discounts should also widen to allow European mills to remain competitive against Asian competitors using cheap Indonesian-origin nickel pig iron, Ehrenberg said.

And European and US mills should increase scrap usage in their raw materials mix to compete against NPI-based stainless steel production in Asia, he added.

He said Outokumpu had successfully experimented with a raw materials charge mix containing 95% stainless steel scrap to make grade-304 stainless steel – up from the usual 85%.

However, for other grades, such as type-316 stainless steel, where scrap availability is lower, ferro-nickel will still be required, Ehrenberg said.

Despite high transport costs from Asia, NPI does not pose technical issues and could also be used as an alternative input for European and US mills, according to Outokumpu.

However, Gerhard Pariser, head of market research at stainless scrap recycler ELG Haniel, told conference attendees that the use of stainless scrap as a raw material instead of NPI or ferro-nickel “significantly lowers stainless steel’s carbon footprint.”